UK Federation Of Small Businesses Facing Heightened Criticism, Waning Membership

The U.K. Federation of Small Businesses (FSB) is facing increased criticism from some of its early supporters, a problem compounded by the complications and uncertainty of Brexit as well as declining membership, according to news reports from the Financial Times on Monday (Oct. 9).

One of the FSB’s 31 regional councils will put forward a no-confidence vote during the national council meeting this week, the publication said, as some supporters express doubt over the Federation’s plans to shake up its membership structure.

“The changes will ultimately remove all power from our members and from the regions,” said Ian Handford, a former FSB national chairman, in an interview with the publication. He added that the FSB’s leaders are gradually consolidating power to its board of directors. “The vote of no-confidence in the board is the only weapon left in the armory, but it’s a great big one.”

The U.K. Federation of Small Businesses’ board has 11 members elected every year at an annual meeting. Its current leader, Mike Cherry, told the Financial Times, “The overriding benefit of the changes is to invest and continue the modernization in FSB and deliver more to our members.”

That modernization initiative first began in 2014, reports said. The changes include no longer having local members elected by their branches for regional representation in the FSB. Additionally, regional branches would not receive funding from the board for running costs, either.

Reports said the FSB, a lobbying group, is mainly funded by subscription fees. Membership has stalled since 2006 and has remained stagnant at around the 200,000 mark. That figure represents just 4 percent of all U.K. small businesses — about 5 million of them, according to the publication. With membership lagging, the organization has been forced to defend its position that, according to the FSB, represents the interests of the nation’s entire small and medium-sized business (SMB) community.

The FSB is also a member of the Brexit advisory group headed by Philip Hammond.